About New Payments Platform
Due to launch in 2017, the New Payments Platform (NPP) will be an open access infrastructure for fast payments in Australia. The NPP is being developed via industry collaboration to enable households, businesses and government agencies to make simply addressed payments, with near real-time funds availability to the recipient, on a 24/7 basis. Each payment message will be capable of carrying much richer remittance information than existing systems (for instance the 18 characters currently available for Direct Entry payments). The NPP infrastructure will support multiple ‘overlay’ services that can be independently developed to offer innovative payment services to end-users.
In 2012, the Reserve Bank published the Conclusions of the Strategic Review of Innovation in the Payments System, setting out strategic objectives for the Australian payments system. These included the ability for users to make real-time payments; send more complete remittance information with payments; address payments in a relatively simple way; and make and receive payments outside normal business hours. The Bank invited industry to determine the most effective way of delivering on those objectives. It subsequently developed ‘core criteria’, expanding on the initial strategic objectives, in order to provide industry with a more detailed set of expectations and also to serve as a tool against which it could assess any proposals.
In response, an industry committee proposed that a new, purpose-built payments infrastructure, the NPP, be developed. In February 2013, the Payments System Board welcomed the proposal as making substantial initial progress towards meeting the strategic objectives. In 2014, twelve Authorised Deposit Taking Institutions committed to funding of the build and operation of the NPP and became the founding members of NPP Australia Limited.
The Reserve Bank has played a significant role in establishing the broad direction of the industry's efforts. It is also building the settlement component of the NPP, known as the Fast Settlement Service, to allow transactions to be settled individually on a 24/7 basis, in close to real time. The Bank has subscribed as a participant in the project, with the expectation that its Banking Department will use the NPP infrastructure.